Success Story: NewPath Consulting

  • By: Lean Payments

NewPath Consulting, Lean Payments Client

Based in Toronto, Canada but serving clients across North America, NewPath provides affordable consulting services and implementation support to small businesses and membership-based organizations. NewPath has specific implementation expertise in Wild Apricot, WordPress, Google Data Studio, Formstack and Integromat. The company offers both fixed-cost implementation packages and monthly support and care plans.

 

Before Lean Payments

NewPath Consulting is a Canadian firm with clients in the US and around the world.  With most payments in US dollars, founder Alex Sirota wanted to streamline his cashflow process.

 

► 60 - 120 Days To Receive Funds

► 2.9% - 5% Fees To Get Paid Online 

 

With Lean Payments

After signing up with Lean Payments, NewPath was ready to start accepting and making payments accepting payments through a virtual US account

 

► 1 - 2 Days To Receive Funds

► $9.99  Fixed Fees To Get Paid Online 

Getting Paid Timely By US Clients Is A Challenge

Waiting For Cheques To Clear Has Created Significant Cash Flow Issues For NewPath

 

With business mostly coming from the United States, NewPath is frequently paid in US dollars. To protect cashflow, company founder Alex Sirota is constantly looking to streamline NewPath’s banking processes. But getting paid – and paying suppliers – across international borders is much harder than one would think.

 

For clients paying by cheque, Alex must wait up to two months to see money clear into his Canadian bank account - if the payment is processed upon receipt.  If a client has 90-day payment terms, he could be waiting close to five months to see money in his account.

Get Paid In One Business Day
Canadian Banks Aren’t Keeping Up

“For a Canadian Small Business, Getting Paid in US Dollars Is Like Doing Business In The 1950s”

 

"Getting paid in US dollars is akin to doing business in the 1950s," says Alex. "First, my client must physically write a cheque, which has to be signed by two people. That cheque is then mailed, which takes anywhere between 10 and 30 days to arrive – with time frames even longer during the pandemic.”

 

According to Alex, electronic bank transfer across borders is equally challenging, if not downright impossible. Many clients wish to use an automated clearing house (ACH) payment method to save bank transfer charges.  But ACH transfers are only domestic, so this method doesn’t work with international invoices.

 

“It’s almost like Canadian banks don’t understand that we have clients in the United States,” says Alex “I don’t know why the technology hasn’t been modernized. Is it on purpose? The banks don’t want me to accept  US dollar payments, period.  I don’t know why that is.”

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Paying US Subcontractors Is Equally Frustrating

American Banks Hold Foreign Cheques For Weeks Before Releasing The Funds

 

To deliver his services internationally, Alex also has a network of subcontractors and vendors, many of whom also reside in the US. While he prides himself on paying his vendors and contractors promptly, paying US subcontractors from Canada is a hassle. Because they are receiving a cheque from a foreign country, American banks will make Alex's subcontractors wait days or weeks for their payment to clear.

 

"It's as if it's the first time they received it from a different country," Alex says. "The idea of taking money from other countries assumes fraud is rampant, so they put up all these barriers.  And you know what? Small businesses get hammered."

Pay US Contractors With Ease
Fees Using Online Payment Services Add Up Fast

Online Payment Processers (e.g. Stripe) Charge 2.9- 5% In Fees per Transaction

 

Alex started taking payments online through his Freshbooks account, which uses Stripe. Alex quickly started to feel the pain:  "The costs to the business grow exponentially as our business grows," says Alex. “We paid approximately $5,000 in fees last year.”  "Xero, Wave, FreshBooks, QuickBooks – all of them offer a special way of getting paid electronically. But all of them effectively pass on the costs to the customer," explained Alex.

 

"I'm penalized for every transaction. That amount could be invested in so many other important things that are much higher value."

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Lean Payments Helps NewPath Pay & Get Paid Easily & Timely

Alex Gets Paid Faster, And So Do His Team & His Vendors – Without Big Fees

 

As his US clients adjust to the idea of paying electronically, Alex has begun piloting Lean Payments to streamline payment for his US subcontractors.  Where payments used to take 1-2 months to clear, it now takes between 1-2 business days.  With Lean Payments, NewPath can streamline its payment process.  Alex is now laying the groundwork to get paid by US clients faster, preserving that all-important small business cash flow.  

 

 "I’m very excited about expanding Lean Payments and getting my clients on board. It’s an adjustment for them for sure, but I look forward to getting paid faster,” says Alex.

 

► Are you a small or medium-sized business looking to preserve cash flow, get paid and pay suppliers faster?

►  Do you want to eliminate the hassle that comes with cross-border payments?

Sign up with Lean Payments Today